Canadian Mining Journal


DOING SOME DIGGING – Grace-less under pressure

It's human nature, I guess, that if one has something valuable someone else will want it. The same might be said of...

It’s human nature, I guess, that if one has something valuable someone else will want it. The same might be said of corporate nature. Two recent fights have sprung up regarding potential gold mines.

In the first dispute, Vancouver-based PIONEER METALS accused NOVAGOLD RESOURCES, also of Vancouver, of “irresponsible” statements to the public, and Pioneer asked the BC Ministry of Energy & Mines to revoke NovaGold’s work permits for the Grace gold-copper claims. The dispute may have been triggered by NovaGold’s hostile takeover offer for Pioneer. Further muddying the waters is an option agreement that relates to subsurface rights only, granted by NovaGold to Pioneer.

Earlier this week, on July 17, the BC government reaffirmed NovaGold’s right to work the Grace claims. The claims are part of the Galore Creek project located 150 km northeast of Stewart. NovaGold has the project in the environmental review phase of development. The project has estimated total capital costs of US$1.1 billion to build a 65,000-tonnes/day mine and mill, but cash costs of production during the first six years would be US$140/oz of gold and US$0.57/lb of copper.

Two other firms, AQUILINE RESOURCES of Toronto and IMA EXPLORATIONS of Vancouver took their ownership squabble over the Navidad silver-lead project to court. The Navidad claims are located in the Patagonia region of Argentina. As reported by IMA, the deposit contains as much as 305.7 million oz of silver and 2.9 billion lb of lead in indicated resources.

Aquiline charged that IMA broke a confidentiality agreement with respect to staking the claims. The Supreme Court of British Columbia agreed and awarded ownership of the disputed claims to Aquiline. IMA vows to appeal.

The lesson to be learned is that in times of high metals prices, lawyers as well as miners can make money.

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